The steady movement overseas of Chinese financial institutions continues with Ping An Insurance taking a 4.2% stake in Fortis, the Belgo-Dutch group, for $2.7 billion. China Life, Ping An’s larger rival, said earlier this week it planned to buy a stake in a big European or North American insurance company.
In part this is reflection of Beijing’s switch from conservative management of its huge foreign exchange reserves to more return-oriented portfolio investment, but is also marks a widening of the range of companies Beijing is pushing out into the world. Last year a quarter of China’s $21 billion of outward investment went into natural resources. That focus is diffusing.
So far China’s banks have led the way for its financial services firms. ICBC took a 20% stake in Standard Bank in South Africa for $5.5 billion as well as a 90% stake in Indonesia’s Halim Bank. Bank of China is reportedly interested in buying Standard Chartered Bank. CITIC has taken a cross holding in the U.S.’s cash-strapped Bear Stearns investment bank and China Development Bank has taken a stake in the U.K’s Barclays and is tying up with the United Bank for Africa in Nigeria.
China is stacking up the reserves fast enough for this foreign buying spree to continue — just as European and American financial firms are stepping up their complaints that they aren’t getting fair access to the Chinese market.